It’s been nearly three years in the making, but under the leadership of vice president of private brands Chandra Holt, Sam’s Club has consolidated its 20 proprietary brands into Member’s Mark.
Holt told Talk Business & Politics her teams have been reinventing the Member’s Mark brand, but that’s not just slapping a new label on the items. Holt’s team held intensive focus groups with members last year to find out where Sam’s Club could improve on its private brand strategy. She said Member’s Mark will not only stand for value, but it also must meet or exceed quality standards from the competition brand names.
This brand overhaul is being done by Holt’s team, which includes product developers as well as culinary experts and food scientists. Sam’s Club declined to say what this initiative costs, only that it’s core to the mission of new CEO John Furner, who has vowed to focus on people, product and technology.
“In the past we made sure we were competitive with national brands,” Holt said. “But, in today’s environment, a lot of our members want better than that. Our goal is to make sure every Member’s Mark item is developed based on what our members want today.”
Part of the shopping experience at Sam’s Club is to be “wowed by the unexpected,” Holt said. “Club managers are demonstrating Member’s Mark products each weekend of the year throughout the clubs and I love it when I hear from our member that they sampled an item and bought it, not realizing it was Member’s Mark private brand until they got it home.”
Holt said her team is in constantly search for quality products that can be offered at a value. Sometimes that means Holt and her team travel the globe in search of the products such as olive oil sourced from Italy, where she met with olive and tomato farmers. She said there is a Member’s Mark sangria that was sourced near Madrid, Spain, and frozen lasagna sourced from Chicago, traced back to an Italian family recipe.
Next week, Holt is traveling to Colombia to meet with a coffee growing cooperative about Member’s Mark opportunities. She said this year Sam’s Club will launch 300 new Member’s Mark items and continue to revamp about 600 others. Holt said right now private label is about 20% of the club inventory. With the 300 new items added this year, the retailer is hoping to push that up to 25%. The focus on new products under the Member’s Mark brand range from fresh foods and consumables to health and wellness. She said work is also being done in apparel with a designer who is working on children’s clothing at this time.
Holt said Sam’s has worked with suppliers to give consumers less processed and more whole foods. She said one example her team took from members was in the area of an all-natural pulled pork. She said Sam’s Club worked with pit masters of the Kansas City Barbecue Society to create a pre-smoked barbecue with just a few ingredients: pork, water and seasonings. This natural pulled pork family pack sells for less than $10 and all consumers have to do is heat and serve with their favorite sauces. Holt said it’s the best-selling item in the category.
Sam’s also continues to focus on repackaging and sometimes reformulating existing Member’s Mark items. One example of repackaging is in the boxes of Member’s Mark Donut Coffee — 100 single-serve cups. The box was shrunk down in size for a more sustainable footprint and features images of colorful donuts on the packages. It’s also priced at $39.98, a value compared to the Green Mountain Donut Shop K Cup brand at $47.48 per box.
Holt said her team didn’t want the packaging of Member’s Mark to look generic in anyway and given the brand covers everything from battery chargers to strawberry jam she felt the best rules were no rules. That’s why the Member’s Mark Black Tea sourced in London features a whimsical skyline of the city that could double as an adult coloring book page. But the packing for Member’s Mark Ultimate Liquid Clean Liquid laundry detergent looks a bit like the orange Tide bottle. She said the packaging might be re-examined later, but right now it’s selling well because of its value proposition and high Consumer Reports recommendations. The Member’s Mark detergent costs $14.98 for 127 total loads. The Tide comparison costs $20.98 for 80 total loads.
Retail consultants have applauded Sam’s Club efforts to consolidation their private labels into a single brand and try and build loyalty to that name.
Carol Spieckerman, CEO of Spieckerman Retail, told Talk Business & Politics that Sam’s Club need only to look as far as Costco to see how brand loyalty can exist in the club space.
“Costco serves as an obvious example of how creating a power brand and really getting behind it can move the needle and more importantly, drive destination shopping,” Spieckerman said. “Costco has built a tremendous amount of trust and loyalty for Kirkland over the years — it is the envy of the industry.”
She said building brand loyalty takes time, adding that raising the quality of the private brand is key while also keeping the price competitive.
Clint Lazenby, also a consultant at #On Shelf, applauded this strategy two years ago when it was announced by then-CEO Rosalind Brewer.
“I would say the key for Sam’s Club, as for any brand, is to ensure they have a clear long term strategy for the brands they are going to get behind,” he said. “Creating brand equity is extremely hard and expensive, so focusing this on fewer brands should be advantageous.”